2016 began with increased market activity and rapid rise in house prices. Home sales between January and February continued on this course - up 16.1% year on year...

However, prices begin to settle down with UK average house prices stable over the past month and annual house price growth up only slightly to 6.9%.

Regionally, the surge in house price growth in London begins to ease. The stamp duty surcharge on second homes coming into effect in April is likely to have brought forward purchases. A possible slowdown is expected in the months ahead with the new stamp duty surcharge dampening investment property sales, and uncertainty around the EU referendum and possible Brexit impacting buyer/seller confidence.

Commenting on the findings, Katherine Binns, research director of HomeOwners Alliance says:

“The planned change to stamp duty on second homes coming into effect in April has clearly driven market activity early in the year. Looking forward, a slower property market is likely. The upcoming stamp duty changes on second homes are expected to take the heat out of the investor market and uncertainty around the EU referendum could also slow activity as buyers and sellers wait to see the result of the referendum and possible impact of Brexit."

April 2016 House Price Watch

April 2016 House Price Watch indicates house prices are on average unchanged in the past month and up 6.9% in the past year.

Rate of monthly house price growth begins to level off

The start of 2016 began with increased market activity and a rapid rise in house prices. Activity has remained strong through Q1 2016 with UK home sales up 5.5% between January and February and up 16.1% year on year (seasonally adjusted HMRC).

However, we are beginning to see house prices settle down with UK average house prices stable over the past month and annual house price growth up slightly to 6.9% in this month’s House Price Watch (average of indices).

The supply of homes for sale remains low but has eased slightly with new instructions by home sellers reported by RICS to be up in December and January and the supply of newly built homes in 2015 up 20% on the previous year with the highest annual total since 2008.

Uncertainty in the months ahead

It is expected that stamp duty changes on second homes coming into effect in April have brought forward transactions from those wanting to avoid additional tax liabilities.

Looking forward, a slower property market is anticipated. The upcoming stamp duty changes on second homes are expected to take the heat out of the investor market and uncertainty around the EU referendum and the impact of Brexit could also slow activity.